Reichheld’s new book, Winning on Purpose: The Unbeatable Strategy of Loving Customers, shows tracking the actual referrals is the next level, what Reichheld describes as the “gold” in the business—and the future of your customer strategy.
Key Ideas to Improve your Customer Experience
Andy Taylor, Executive Chairman of Enterprise Holdings, once told Reichheld there is only one way to grow. Taylor told Reichheld, “You’ve got to make sure your customers are treated so well, they come back for more and bring their friends.” Reichheld says that’s the basic flywheel that drives all great business.
Reichheld thinks that the right way to determine growth is to measure that flywheel. He would like accounting teams to know how much of their revenue came from customers they have had for a year and all the business of that customer’s referrals, called Earned Growth Rate. Earned Growth Rate separates referral growth from the other growth strategies organizations implement, that can include acquisitions, sales and marketing, or new store locations, among others.
Reichheld sees the Earned Growth Rate concept today as where Net Promoter was 20 years ago. In the next 10 to 20 years, he thinks there won’t be a serious business person that doesn’t know about Earned Growth Rates. He says his new book shows people how to do that.
Here are some key moments in the discussion:
- 03:05 Reichheld explains why his frustration with NPS inspired his book and what he is trying to accomplish with it.
- 09:09 Reichheld makes the argument that there is only one class of purposes that work in business, and explains why.
- 13:18 Reichheld shares the one way to grow a great profitable business, and how it drives his decisions to invest in companies.
- 20:18 Colin asks Reichheld what advice he would give an organization that doesn’t know how to use NPS properly, the way Reichheld intended when he invented it.
- 21:31 Ryan asserts that culture dictates how NPS plays a role in an organization, and asks Reichheld to give advice on how to focus organizations on culture.
- 24:44 We learn the difference between good profits and bad profits, per Reichheld, and how to use NPS better moving forward.
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Customer Experience Information & Resources
LinkedIn recognizes Colin Shaw as one of the ‘World’s Top 150 Business Influencers.’ As a result, he has 289,000 followers of his work. Shaw is Founder and CEO of Beyond Philosophy LLC, which helps organizations unlock growth by discovering customers’ hidden, unmet needs that drive value ($). The Financial Times selected Beyond Philosophy LLC as one of the best management consultancies for the last two years. Follow Colin on LinkedIn and Twitter.
Click here to learn more about Professor Ryan Hamilton of Emory University.
Why Customers Buy: As an official “Influencer” on LinkedIn, Colin writes a regular newsletter on all things Customer Experience. Click here to join the other 22,000 subscribers.
Experience Health Check: You already have an experience, even if you weren’t deliberate about it. Our Experience Health Check can help you understand what you have today. Colin or one of our team can assess your digital or physical Customer Experience, interacting with your organization as a customer to define what is good and what needs improving. Then, they will provide a list of recommendations for critical next steps for your organization. Click here to learn more.
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